Lombardi analyst call: executive re-org and 2007 results

Lombardi held an analyst conference call last week in advance of today’s press releases — a relatively new format for them — to discuss their executive reorganization against the backdrop of their 2007 results and 2008 strategy. Rod Favaron, CEO (and, until last week, President) and Phil Gilbert, President (formerly CTO) gave us the update. The press releases are here and here.

In 2007, Lombardi had a revenue growth of over 60%, which is actually a drop from their previous growth of over 100%, but still pretty healthy; in 2008 they expect it to stay around 60%. Given the current climate of impending recession in the US, I’d be surprised if they achieve that, but I expect that they’ll still continue show strong growth based on their now-established track record of 7-figure sales. In fact, they think that hard economic times can actually drive sales of BPM.

They’re starting to expand internationally: 35% of their sales were outside North America, mostly Europe, likely helped along by the European office that they’ve expanded to assist their direct sales and resellers in the region. Not having to fly people back and forth from the US all the time would definitely be a big help both in terms of reducing the cost of sale and providing local support, and this marks a significant milestone for any growing US software company that is selling internationally or dealing with multi-national companies. Alan Godfrey, formerly EVP of Marketing, has moved to London to scale up the European operations, and their former European sales head has moved on to build out the Australian and southeast Asian market.

They claim that they started 2007 competing against the pure-plays (e.g., Savvion, Appian), and ended it competing against the stack vendors, with most of their competition now from IBM, Oracle/BEA, TIBCO and Pegasystems.

From a product and services standpoint, they’ve combined platforms (Teamworks and Blueprint), solutions and professional services all under Phil Gilbert as a Global Business Solutions group that builds product and packages combinations of product and services (such as process analysts and mentors) into solutions. Their major upgrade to Teamworks in 2007 included some new SLA and KPI monitoring to allow business people to understand the process in business terms, not technical terms, and the release of Teamworks for SharePoint to allow collaboration in SharePoint within the context of a structured Teamworks process.

They’ve had a good uptake with Blueprint, their SaaS process modeling tool. They expect to end 2008 with the best business-facing process modeler in the industry, by which I think that they mean Blueprint. A major update to Blueprint is due in April, and mid-year they’ll merge the Blueprint and Teamworks repositories, which I think is a significant step forward. A major release to Teamworks is due in the second half of the year; a pre-release version is already available to some customers, which bodes well for them actually making their release dates.

In April, they’ll be offering some joint product/services packaged offerings, including a focus on modeling, optimization and helping customers to establish an internal BPM center of excellence. Productizing a package of services is a logical step for Lombardi, but puts them in direct competition with their partners in regions where they sell through partners. Even if they’re using the partners as subcontractors in these packages, I’ve seen first-hand in the past with other BPM vendors how this can alienate the partner channel, which in turn impacts growth.

What is great to see is that Lombardi is promoting a lot from within: a few people who I know (in addition to Phil) have been moved up in the ranks to take on more responsibility, and all are well deserving. Nothing better for company morale than promoting someone who’s capable and well-liked rather than hiring in a big gun from outside.

I’m guessing that taking over as president is going to give Phil even less time to blog, but maybe that will encourage him to embrace Creative Commons and publish his book on there as a serial.

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